UTS, NSW government in talks for Powerhouse Museum in Sydney's Ultimo

The University of Technology Sydney is reportedly in talks with the NSW government to buy the Powerhouse Museum in Sydney's Ultimo as it looks at ways to expand its campus.

UTS and the government have not confirmed if the university has lodged an unsolicited proposal to buy the museum, but the Australian Financial Review cited sources as saying that the two parties were in negotiations.

The lecture theatre at the museum is already being used by the university for  classes as its main campus Building Two undergoes an upgrade. 

The university is keen on the site as it is less than a kilometre from its campus, either for expansion or for student accommodation, university sources told the AFR.

A university spokesman declined comment on the talks but said "the university is deeply involved in advancing the Ultimo precinct, already Sydney's creative digital technology hub". 

The precinct had the highest density of tech start-ups in Australia, he said. 

The NSW government first announced plans to sell off the Ultimo site of the Powerhouse Museum, part of the Museum of Applied Arts and Sciences, in 2105 and use the money to fund a new museum in western Sydney. 

The future use of the site has been met in controversy since the announcement.

Philip Thalis, architecture faculty industry advisory group member at University of Newcastle, had called the decision a mishmash of wedge politics and bad policy.

Earlier this month, NSW arts minister Don Harwin said the Ultimo site could remain a "cultural space" but would not reveal plans for the site. 

This is not the first time the NSW government has entertained unsolicited public proposals for public assets. Macquarie Group's unsolicited bid for the Martin Place redevelopment beat Dexus to the deal. 

A private developer has said a private sale without a public tender would not recover the best value for the state.